Assessment Ventron's Director of Engineering, Vijay Gupta, is most interested in the opportunity provided by this...

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Assessment Ventron's Director of Engineering, Vijay Gupta, is most interested in the opportunity provided by this new material. He feels that if Ventron is successful in producing the new blade spar, the company's reputation would be enhanced. After a preliminary review of the problem, Ventron's President, Sandra Kim, has not yet reached a final decision. Like Gupta, she is intrigued by the possibility of successfully designing the spar based on new materials: she feels that this might give Ventron a chance at additional contracts. However, Kim also wants to minimize the cost of designing the blade spar and she is concerned about the possibility of wasting money on unsuccessful design efforts. New Materials Exhibit 1: Data for the Blade Spar Design Decision Cost/month ($000s) Probability of success Time required (months) Total cost ($000s) Material testing 50 .90 6 300 Molding process 160 .75 6 960 Conventional Materials Normal basis 150 1.0 Accelerated 400 1.0 26 12 1,800 2,400 Ventron Engineering is an engineering design firm, specializing in aerospace design (e.g., in aircraft wings and helicopter rotors) and, recently, in wind energy systems. Ventron has been awarded a contract to design a blade for a new wind turbine rotor system (i.e., a really big windmill). These blades will be part of a new five-megawatt, high-efficiency turbine intended for marine installations. The contract requires that the blade spar design be completed in 18 months. Assessment Ventron's Director of Engineering, Vijay Gupta, is most interested in the opportunity provided by this new material. He feels that if Ventron is successful in producing the new blade spar, the company's reputation would be enhanced. After a preliminary review of the problem, Ventron's President, Sandra Kim, has not yet reached a final decision. Like Gupta, she is intrigued by the possibility of successfully designing the spar based on new materials: she feels that this might give Ventron a chance at additional contracts. However, Kim also wants to minimize the cost of designing the blade spar and she is concerned about the possibility of wasting money on unsuccessful design efforts. New Materials Exhibit 1: Data for the Blade Spar Design Decision Cost/month ($000s) Probability of success Time required (months) Total cost ($000s) Material testing 50 .90 6 300 Molding process 160 .75 6 960 Conventional Materials Normal basis 150 1.0 Accelerated 400 1.0 26 12 1,800 2,400 Ventron Engineering is an engineering design firm, specializing in aerospace design (e.g., in aircraft wings and helicopter rotors) and, recently, in wind energy systems. Ventron has been awarded a contract to design a blade for a new wind turbine rotor system (i.e., a really big windmill). These blades will be part of a new five-megawatt, high-efficiency turbine intended for marine installations. The contract requires that the blade spar design be completed in 18 months.